Mazhar Mohammad Saleh, financial adviser to the prime minister
Adviser to Iraqi PM says Venezuela crisis could lift oil prices toward $70
BAGHDAD — Prime Minister adviser Mazhar Salih said Saturday that global oil prices are likely to rise after U.S. forces carried out a military operation in Venezuela that Washington said targeted the country’s leadership and key sites, citing heightened geopolitical risks and tight market conditions.
Salih told the state news agency that “in light of global tensions, foremost among them the Middle East, weak inventories and their decline, this will contribute to raising oil prices to around $70.”
He said global prices have fallen in recent periods, and noted that Brent crude was trading around $61 a barrel on Friday, while U.S. West Texas Intermediate was near $57.
Salih said “the quantitative impact of Venezuelan oil may appear limited compared with global production of 102 million barrels per day,” but added that “Venezuela possesses one of the world’s highest proven oil reserves and is a country of high symbolic value in energy market balances in the southwestern hemisphere.”
He added that “the outbreak of a U.S.-Venezuelan war will add geopolitical risks that raise prices immediately in the short term, because the market will read the event as a dangerous indicator of the return of using oil as a political and military weapon, which threatens supply stability in South America.”
Salih said “the convergence of these factors could lead to compounded price effects, raising oil prices to around $70 per barrel or more if military tension continues in the world’s three main energy regions (Eurasia, the Middle East and South America), which is known as ‘systemic risk’ in the oil market.”
The remarks followed developments early Saturday in Venezuela, where U.S. forces carried out an operation that U.S. officials said resulted in the detention of President Nicolás Maduro and his wife. Venezuelan authorities condemned the action as military aggression and declared a state of emergency as regional and global actors monitored the fallout in a country that holds the world’s largest proven oil reserves.